By MAY WONG, AP Technology Writer
As the Friday launch of the Apple iPhone neared and anxious customers
formed lines to grab one, AT&T Inc. announced Tuesday that service
plans for the hotly anticipated smart phone will start at $59.99 per
The two companies also said customers will be able to activate their
wireless service, including transferring their existing cell numbers
to the handset -- from home, using Apple Inc.'s iTunes software.
That's a convenience no other cellular carrier offers and something
UBS Securities analyst Benjamin Reitzes called a "game changer" for
the industry. Making the purchase and activation easy will lower
selling costs and potentially further lift sales, Reitzes said
Three monthly plans with a minimum two-year service contract will be
available: the $59.99 plan includes 450 minutes of voice time; a
$79.99 plan includes 900 minutes; and a $99.99 plan includes 1,350
minutes. All three offer 200 text messages, unlimited data services,
minutes that roll over month-to-month and mobile-to-mobile
calls. There also is a $36 activation fee.
Customers can pay extra for plans to get more talk time or text
messages. Several family-style plans also are available, ranging from
$80 a month for 700 shared minutes to $120 for 2,100 shared minutes.
The monthly rates for the iPhone are roughly $10 less than comparable
service plans for other smart phones offered through AT&T, AT&T
spokesman Michael Coe said.
The monthly fee will be on top of the iPhone's price -- $499 for a
model with 4 gigabytes of storage and $599 for one with 8
gigabytes. The phone is slated to go on sale at 6 p.m. local time
Friday at Apple and AT&T stores as well as Apple's Web site.
Apple claims the iPhone -- which combines the functions of a cell
phone, iPod media player and Web-surfing device -- will be easier to
use than other smart phones because of its unique touch-screen display
and intuitive software that allows for easy access to voice mail
messages, the Internet, and video and music libraries. AT&T is the
gadget's exclusive carrier.
Anticipation for the handset has reached -- or arguably even surpassed --
levels usually reserved for new video game consoles.
Five people were in line by Tuesday afternoon outside Apple's Fifth
Avenue store in New York City, three of them having been in line since
"Words can't express why I want an iPhone," said Jessica Rodriguez,
24, a college student. "The main reason is (Apple CEO) Steve Jobs is a
genius. He's a great innovator. It's going to be the next big thing in
Sitting in a red folding chair she brought, Rodriguez said she was
planning to get a $599 iPhone as a belated birthday gift for her
sister. If the store will let her buy two, she said, she'll get one
Apple isn't saying how many total iPhones it will have at launch and
hasn't disclosed whether there will be any per-person purchase limits.
Coe said purchases at AT&T stores will be limited to one per customer.
Meanwhile, some people who are unable to queue up themselves have
posted help-wanted pleas on community Web sites like Craigslist,
offering to pay someone to stand in line for them.
The iPhone's price -- which doesn't include any kind of carrier
subsidy commonly offered for other cell phones -- lands on the
high-end of the smart phone market, but analysts say the service plans
are very competitive.
Sprint Nextel Corp., for instance, also charges $59.99 a month for 450
minutes of talk time, $79.99 for 900 minutes and $99.99 for 1,350
minutes along with unlimited data service. Its plans allow, however,
up to 300 text messages and starts its unlimited evening calls at 7
p.m. instead of AT&T's 9 p.m. start time.
Verizon Wireless plans to launch new "premium" plans in July, starting
at $79.99 for 450 minutes with unlimited calls on a Verizon network,
unlimited nights and weekends, and unlimited messaging and data
services, company spokeswoman Brenda Raney said. The most expensive
plan will be $239.99 for 6,000 minutes of talk time, she said.
Skeptics question whether the iPhone can live up to its lofty
expectations. Scrutiny of the product is so great that any small
disappointment could send Apple's stock plunging, analysts say.
Apple shares dropped $2.69, or 2.2 percent, to $119.65 on Tuesday.
Shares of AT&T fell 7 cents to close at $24.61.
Andy Hargreaves, a Pacific Crest Securities analyst, said Apple
shareholders have run the stock up in anticipation of the iPhone's
release, and they don't feel it will go much higher after the product
is available, he said.
"I think expectations are very, very high and some people are taking
some money off the table ahead of the launch," WR Hambrecht analyst
Matthew Kather said.
Associated Press staff writers Nick Jesdanun and Barbara Ortutay in New
York contributed to this report.
Copyright 2007 The Associated Press.
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